I Nyoman Pujawan

Assessing supply chain flexibility: a conceptual framework and case study

Flexibility has been considered as a major determinant of competitiveness in an increasingly intense competition in the marketplace. A large body of literature has been addressing various issues of flexibility in the last two decades. However, the discussions have mainly been from the viewpoint of a manufacturing company as a single entity in a supply chain. The flexibility related to machine, process, routing, part, worker and the like are all associated with a manufacturing or a production system. With the advent of the supply chain management concepts, business communities have been realising that being flexible in a production system only is insufficient. Thus, flexibility concepts should be broadened from the perspective of a production system into a supply chain system. However, the study addressing supply chain flexibility is still limited. This paper presents a framework for assessing flexibility of a supply chain. Four main parts of flexibility are identified including flexibility of the product delivery system, production system, product development, and supply system. In each of these parts, a number of pertinent elements are defined. A general guideline for conducting flexibility assessment is also presented. In an attempt to assess the model validity, a case study also forms a part of the paper.

House of risk: a model for proactive supply chain risk management

Purpose – Increasingly, companies need to be vigilant with the risks that can harm the short‐term operations as well as the long‐term sustainability of their supply chain (SC). The purpose of this paper is to provide a framework to proactively manage SC risks. The framework will enable the company to select a set of risk agents to be treated and then to prioritize the proactive actions, in order to reduce the aggregate impacts of the risk events induced by those risk agents.Design/methodology/approach – A framework called house of risk (HOR) is developed, which combines the basic ideas of two well‐known tools: the house of quality of the quality function deployment and the failure mode and effect analysis. The framework consists of two deployment stages. HOR1 is used to rank each risk agent based on their aggregate risk potentials. HOR2 is intended to prioritize the proactive actions that the company should pursue to maximize the cost‐effectiveness of the effort in dealing with the selected risk agents in...

The effect of lot sizing rules on order variability

Previous papers have presented the impact of various aspects, such as forecasting techniques, centralising information, and ðs; SÞ ordering policy, on the variability of orders in a supply chain. In this paper we observe several properties of two traditional lot sizing rules, the Silver Meal (SM) and the least unit cost (LUC) on the variability of orders created by a supply chain channel receiving demand with stochastic variability from its downstream channel. Analytical models have been developed to compare the mean and variance of both order interval and order quantity produced by the two rules under relatively low demand variability. We show that, although the two rules appear to be very similar, they exhibit interestingly different behaviour. The SM rule is shown to produce a series of orders with more stable interval between orders but with more variable order quantities. Conversely, the LUC rule results in more stable order quantities but more variable order intervals. The study also reveals that addition of an appropriate amount of extra quantity to an order could significantly reduce order variability. With an increasing concern on the amplification of order variability in supply chains recently, the results provide interesting insights on the choice of lot sizing rules to be applied by a channel of a supply chain in determining ordering policies. � 2003 Elsevier B.V. All rights reserved.

Factors affecting schedule instability in manufacturing companies

Schedule instability is a major issue in many manufacturing companies. It results in a low service level to customers, high inventory levels, and high costs associated with production changeovers. Much has been written on schedule instability in the literature, but most studies have used simulation and mathematical modelling to look at the internal operations of manufacturing companies. While schedule instability has always been very much a practical problem, there have been few empirical studies presented in the literature. The aim of this research was to obtain the opinions of practitioners on schedule instability, and to identify factors that affect the perceived level of instability experienced by manufacturing companies. An e-mail/web-based survey was administered to practitioners working in the planning and scheduling area. The results suggest that the majority of the respondents perceive schedule instability to be either an important or a very important issue in their operations. Analysis of the responses also shows that schedule instability is affected mainly by external factors, notably relationships with buyers and relationships with suppliers; internal operations have a lower impact. The research moves the debate about schedule instability beyond the current concentration on simulation and mathematical modelling, and from a focus on internal operations to a supply-chain context.

Integrated inventory model for single vendor-single buyer with probabilistic demand

In this paper, we consider single vendor–single buyer integrated inventory model with probabilistic demand and equal delivery lot size. The model contributes to the current literature by relaxing the deterministic demand assumption which has been used for almost all integrated inventory models. The objective is to minimise expected total costs incurred by the vendor and the buyer. We develop effective iterative procedures for finding the optimal solution. Numerical examples are used to illustrate the benefit of integration. A sensitivity analysis is performed to explore the effect of key parameters on delivery lot size, safety factor, production lot size factor and the expected total cost. The results of the numerical examples indicate our integrated model gives a significant cost savings over independent model.

Managing uncertainty through supply chain flexibility: reactive vs. proactive approaches

The purpose of this paper is to obtain insights into the typology of uncertainty and relevant strategies adopted by manufacturing companies to achieve better supply chain flexibility. Strategies are classified into reactive (buffering) and proactive (redesigning). We develop a framework that links supply chain uncertainty, the two types of strategies for achieving supply chain flexibility and the relevant objectives to be achieved. Four case studies are compared in terms of uncertainty typology and strategies being adopted to improve supply chain flexibility. We present three propositions as a result of the study. First, to achieve better flexibility, companies have been focusing more on buffering than on proactive or redesign strategies. Second, companies tend to focus on internal operations rather than collaborating with external parties, and third, the power structure in a supply chain governs the type and configuration of supply chain flexibility.

Managing sales return in dual sales channel: its product substitution and return channel analysis

Although many efforts have been devoted in exploring dual sales channel (DSC) financial performance, the issue of managing its sales return is still lacking attention. Mismanagement in such online return handling may threaten channel profitability. Therefore, we propose three scenarios: first, the benchmark scenario is a lost-sales consideration model, the second one is an online facility return scenario, which represents the availability of an online facility to provide product substitution and in accommodating online customer preference to return the product through a conventional store, a conventional store return scenario is also prepared as the third scenario. The first two scenarios cope with the importance of product substitution; meanwhile, the second and the third ones examine the selection of the sales return channel. By analysing the equilibrium values of the total and partial profits given by the channel prices as the primary decision variables under Bertrand and Stackelberg schemes, some beneficial insights for managing a DSC by considering its sales return are provided.

Properties of lot-sizing rules under lumpy demand

When a lot-sizing problem is viewed from a context of buyer–supplier relationships, an important phenomenon frequently encountered by the supplier is a so-called lumpy demand. However, there has been very little attention devoted to study the behaviour and performances of lot-sizing rules under the situation of lumpy demand. This paper presents both analytical and experimental studies of lot-sizing rules for lumpy demand situations. The analytical study is based on the assumption that constant demand occurs for every fixed number of periods. In the experimental study, both the quantity of and the time between demands are allowed to vary. The studies show that analytical results provide good insights in understanding the behaviour and performances of lot-sizing rules when more realistic situations are addressed in the experimental study. The paper also confirms that the results of lot-sizing studies under the situation of non-lumpy demand cannot be entirely generalised to the situation with lumpy demand. r 2002 Elsevier Science B.V. All rights reserved.

Uncertainty and schedule instability in supply chain: insights from case studies

With increasing uncertainty of business environment, schedule instability is a major issue in most manufacturing companies. Academic research on schedule instability has been conducted for more than three decades but results have been dispersed and not well integrated. The objective of this paper is to present a framework and obtain insights of strategies the manufacturing companies applied to deal with schedule instability. To aid in conducting the empirical study, the framework of schedule instability has been developed. It attempts to relate the factors and impacts as well as the two types of strategies to deal with schedule instability. Four case studies have been conducted. We present three propositions from this study which extend the debate of schedule instability from more technical and operational aspects such as lot sizing and planning issues to relationships and design aspects. The findings imply that, in dealing with schedule instability, managers should not only focus on buffering and other reactive strategies, but also move toward better cross-functional team, supply chain collaboration, and proactively designing better flexibility in the supply chain.

Joint economic lot size (JELS) model for single-vendor single-buyer with variable production rate and partial backorder

This paper presents joint economic lot size (JELS) models under stochastic demand for single-vendor single-buyer system by synchronising ordering, production and raw material procurement cycles. We consider variable production rate and partial backorder in the proposed model. An iterative procedure is employed to determine simultaneously safety factor, delivery lot size, delivery frequency, production batch, raw material lot size and production rate for minimising total cost. We investigate the behaviour of the model with the use of numerical analysis. Our study indicates that considering variable production rate in the model results in lower total cost compared to the case where the production rate is assumed to be fixed. Our study also shows that the increase in demand uncertainty leads to higher total costs, but the buyer absorbed most of the increase. In addition, we also show that the minimum total cost is obtained when the shortages are fully, rather than partially, backordered.